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In 1363, former members of the Swedish Council of the Realm, led by Bo Jonsson Grip, arrived at the court in the Duchy of Mecklenburg-Schwerin.
The Swedish noblemen promptly persuaded Duke Albert II of Mecklenburg to intervene against Magnus and Haakon in Sweden and depose them both in favour of his own son, Albert of Mecklenburg.
The foreign policy of Duke Albert II had long been angled towards Scandinavian affairs, especially after his marriage to Magnus ' sister, Princess Euphemia of Sweden, through which he had gained influence in the affairs in Sweden.
In 1364, Duke Albert II enlisted military support from several powerful North German noblemen and proceeded to swiftly invade and conquer Sweden and subsequently installed his son, Albert, as the new King of Sweden.
In November 1365, Albert was formally hailed as the King of Sweden, though he had already been crowned on 18 February 1364.
Magnus sought refuge with his son in Norway where they immediately planned the reconquest of Sweden.
After the initial invasion a temporary truce was established between the two warring parties, and though Haakon and Magnus had lost control over much of Sweden they still maintained control over the important provinces of Västergötland, Dalsland and Värmland.
In early 1365, Haakon and Magnus assembled a large army in Västergötland, consisting mainly of Norwegians, but also a large number of Swedes from the said province, and marched on the German-held city of Stockholm.
On 27 February, Haakon issued a proclamation against Albert of Mecklenburg and his supporters, encouraging the local populace to stir up in rebellion against the German usurper.
The Norwegian army entered Uppland through Västerås and clashed against the Swedish-German army in the disastrous Battle of Gata where Haakon and Magnus suffered a devastating defeat and Magnus was captured and taken prisoner by the Germans ; which he would remain for six years.

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